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VietJet Aviation Joint Stock Company (VJC: HOSE)
Non-Rating Current price: VND 195,700
Kim Nguyen [email protected] In play comes off smoother +84-28 3824 2897 ext. 2140 4Q 2017 results: In 4Q 2017, VJC posted a net revenue and net profit of VND 5.675 tn
(+45.6% YoY). 4Q 2017 net profit recorded VND 91.3bn, declining by 68% YoY. 20 April 2018 INDUSTRIALS– VIETNAM 2017 business review: Regarding the parent company’s results, in 2017, VJC posted a net revenue and net profit of VND 22.645 tn (+42.6% YoY) and VND 1.817 tn (+28% YoY) respectively, showing another impressive year in its core aviation business. The airline’s Key figures Available Seat Kilometers (ASK) was up by 42% YoY in 2017, reaching 23.4 mn seats/km, Market cap (USD mn) 4,140 while revenue passenger kilometers (RPK) also grew by 42% YoY, reaching 20.6 mn Market cap (VND bn) 94,286 passengers/km. Overall passenger yield recorded $0.0369 US cents in 2017, slightly declining Outstanding shares (mn) 451 by -1.7% YoY. On a consolidated results basis, VJC recorded a 2017 net revenue of VND 52W high/low (VND 1,000) 213.4/85.7 42.30 tn (+54% YoY), and a net profit attributable to shareholders of VND 5.074 tn (+103% Average 3M volume (share) 973,469 YoY). The airlines successfully completed 101% and 149% of its 2017 revenue and profit Average 3M value (USD mn) 7.67 targets. Average 3M value (VND bn) 174.65 Foreign ownership (%) 45.50 According to ACV and our collected data, VJC domestic market share stabilized in 2017 at State ownership (%) 0 41%(vs. a 40.8% market share in 2016), whereas Vietnam Airlines (HVN: UPCOM), including Management ownership (%) N.A. subsidiaries Jetstar Pacific and VASCO, held a 59% market share last year.
VJC Price & Trading Volume Earnings estimates: For 2018, We forecast VJC 2018 core net revenue to achieve VND 29.428 tn (+30% YoY). Core net income may reach VND 3.014 tn (+66% YoY), leading to a core EPS of VND 6,683 (+66%YoY) based a tax rate of 10%. Including SLB profit, 2018 consolidated revenue and net profit will achieve VND 48.325 tn (+15% YoY) and VND 5.179 tn (+2% YoY). EPS will be VND 11,481 (+2% YoY).
For 2019, we expect VJC 2019 core net revenue to achieve VND 34,222 tn (+16% YoY). Net income of core business might reach VND 3.548 tn (+17.7% YoY), assuming a tax rate of
20%. According to the company plan, VJC may record 17 aircraft under SLB, and we expect Source: Bloomberg SLB profit to record VND 2.15 tn in PBT (-7% YoY). As a result, consolidated revenue and net Company Snapshot profit are expected to reach VND 54.341 tn (+12.4% YoY) and VND 5.830 tn (+12.5% YoY). VJC is a privately-owned Low Cost Carrier (LCC) airline in Vietnam. It was established on 23rd July 2007, and 2019 EPS may reach VND 12,910 (+12.5% YoY). commenced the first commercial flight on 24th December 2011 with the Ho Chi Minh City - Hanoi route. Total Valuation and investment view: At the current price of VND 195,700/share, VJC is trading at passengers served by VJC reached 14.05 mn pax in 2016 after 4 years of operation. As of 31 Dec 2016, VJC 2018 and 2019 EV/EBITDAR metrics of 9x and 7x respectively. We believe that investors will operates a fleet of 41 aircraft, in which 19 aircraft are appreciate the continued climb of a core EPS growth of 42% and 18% YoY in 2018 and 2019, funded by SLB and 1 aircraft is owned by the company via financial lease. Other aircraft include 15 dry leases and respectively. VJC is one of the fastest growing airlines compared with peers in term of EPS 6 wet leases. growth in 2018 and 2019. Besides, VJC is benefiting from lower CASK ex-fuel than regional VJC achieved a domestic market share of 40.8% as of 31 Dec 2016, an increase from 37.1% as of 31 Dec 2015, peers. according to a report by the Civil Aviation Authority of Vietnam (CAAV)
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4Q 2017 results: impressive topline growth but modest profit
We use the parent company’s 2017 results for comparison, which purely reflects the performance of the core aviation business.
In 4Q 2017, VJC posted a net revenue and net profit of VND 5.675 tn (+45.6% YoY) and VND 91.3 bn (-68.2% YoY) respectively. Although the increase in revenue was encouraging indicator as VJC accelerated its international expansion, the GPM in the 4th quarter nevertheless declined to 8.5% from 12.2% in 4Q 2016 due to a significant maintenance expense of VND 198 bn in 4Q 2017 (vs. that of only VND 15 bn in 4Q 2016).
VJC’s 4Q 2017 net profit recorded VND 91.3bn, declining by 68% YoY. In fact, 4Q 2017 earnings significantly improved YoY thanks to enhanced topline because 4Q 2016 PBT would have recorded a loss of VND -68 bn in 4Q 2016 if we were to exclude financial income in the quarter. In 4Q 2016, VJC recorded financial income of VND 436 bn from dividends received from its subsidiary, Vietjet Air IVB No.1 Ltd (received every 2 years based on investment law of British Virgin Island) meanwhile 4Q 2017 did not have such income event. Such an operating loss in 4Q 2016 is explained by the fact that the 4th quarter of the year is the slowest season for airlines in general, in which regional airlines normally record losses or insignificant profit for the quarter due to a lower load factor in November and December, and higher expenses further compound the issue of profitability during this period.
Regardless of the above, VJC on a respective basis did successfully complete 101% and 149% of its 2017 revenue and profit targets.
Margin (bn VND) 4Q17 4Q16 YoY 3Q17 QoQ % annual target completed 4Q17 4Q16 3Q17 2017 Net sales 5,674.9 3,897.7 45.6% 6,142.0 -7.6% 101%
Gross profit 479.8 475.1 1.0% 1,413.7 -66.1% 8.5% 12.2% 23.0% 15.9%
Operating profit 147.2 -20 n.a 1,131.6 -87.0% 2.6% -0.5% 18.4% 10.9%
EBIT 168.7 422.2 -60.0% 1,150.8 -85.3% 3.0% 10.8% 18.7% 11.2%
EBITDA 238.7 451.0 -47.1% 1,148.8 -79.2% 4.2% 11.6% 18.7% 11.7%
Pretax profit 106.1 367.7 -71.2% 1,093.8 -90.3% 1.9% 9.4% 17.8% 10.2%
Net income 91.3 287.4 -68.2% 984.3 -90.7% 149% 1.6% 7.4% 16.0% 8% NI attributable to shareholders 91.3 287.4 -68.2% 984.3 -90.7% 1.6% 7.4% 16.0% 8%
Source: VJC
2017 business review: Increased capacity, but lower international passenger yield
Regarding the parent company’s results, in 2017, VJC posted a net revenue and net profit of VND 22.645 tn (+42.6% YoY) and VND 1.817 tn (+28% YoY) respectively, showing another impressive year in its core aviation business. International passenger transportation revenue growth of 202% YoY (~11% of total revenue), and ancillary revenue growth of 54% YoY (~24% of total revenue) acted as key growth drivers to total revenue. Additionally, the GPM and net profit margin was also strongly supported by an improved domestic passenger yield, as well as an increased ancillary revenue per pax. Furthermore, the RASK-CASK spread also expanded by 23% YoY, aided by strong topline growth which help to improve efficiency.
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VJC: 2017 parent company business results
VND bn 2017 YoY growth Revenue 22,644 42.6% Passenger transportation 16,956 39% Ancillary revenue 5,471 55% Net profit 1,817 28%
Source: VJC
In 2017, VJC added 17 new aircraft, increasing its total number of aircraft from 40 aircraft in 2016 to 51 as of 2017, executing a 27% YoY expansion in total plane count. The airline launched 22 additional routes for a total of 82 routes in 2017 from only 60 routes by the end of 2016, translating to a growth rate of 36.7% YoY. The airline however added only 1 domestic route in 2017 from its 37 routes in 2016; hence virtually all route growth was international in composition. Due to slow capacity expansion in the domestic market exacerbated from a persistent bottleneck at Tan Son Nhat International Airport, VJC began to boost its international expansion at an accelerated pace last year, and almost doubled its number of international routes as of 2017. It opened 21 additional routes, bringing the total number of international routes to 44 by the end of 2017. As such, VJC’s Available Seat Kilometers (ASK) was up by 42% YoY in 2017, reaching 23.4 mn seats/km, while revenue passenger kilometers (RPK) also grew by 42% YoY, reaching 20.6 mn passengers/km.
VJC overall passenger yield recorded $0.0369 US cents in 2017, slightly declining by -1.7% YoY. This was due to a continued decline in international passenger yields (-30% YoY) amid aggressive fare promotions for gaining market share in the international market. Meanwhile, domestic passenger yields improved by 14% YoY (vs. a decline of -12% YoY in 2016), there was an under supply against the market demand for domestic routes of domestic airlines due flight slot constraint in Tan Son Nhat international airport and temporarily reduced fleet size of Jetstar Pacific Airlines in 3Q and 4Q 2017. According to ACV and our collected data, VJC domestic market share stabilized in 2017 at 41% vs. a 40.8% market share in 2016), whereas Vietnam Airlines (HVN: UPCOM), including subsidiaries Jetstar Pacific and VASCO, held a 59% market share last year.
Domestic passenger carried shares in 2016
2% 15% VJC
41% HVN
Jetstar Pacific
VASCO 42%
Source: VJC, SSI Research
On a consolidated results basis, VJC recorded a 2017 net revenue of VND 42.30 tn (+54% YoY), and a net profit attributable to shareholders of VND 5.074 tn (+103% YoY). Regarding sales and leaseback activities (SLB), VJC received and recognized profit for 17 aircraft (vs. just 10 aircraft in 2016), and recorded a PBT of VND 3.397 tn (+122% YoY). 2017 EPS was VND 11,356 (+73% YoY).
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Outlook
2018
Regarding capacity expansion, VJC plans to receive 16 new aircraft in 2018, including 2 A320 NEO and 14 A321 (NEO and CEO types).
Domestic passenger transportation:VJC targets to open 4 additional domestic routes (+10.5% YoY) in 2018 in order to catch up with increased travel demand within Vietnam. Therefore, we expect VJC domestic passenger transportation revenue to grow by 24% YoY, thanks to an ASK growth of 14% YoY and a 8% YoY growth in domestic passenger yields. We expect VJC passenger loads for domestic routes to slightly improve to 89.3% (from 89.1% in 2017).
International passenger transportation: Due to a slowdown in growth in the domestic market, VJC will boost international penetration rates by adding another 16 international routes this year. (ACV forecasts international passenger volume through its terminals to grow by 11% YoY in 2018). New international terminals in Danang International Airport (having started operations in May 2017) and Cam Ranh International Airport (commencing operations in May 2018) will support VJC to launch their new international routes connecting these 2 airports and other destinations in Asia. Accordingly, we expect VJC 2018 international passenger transportation and chartered flight revenue to grow by 31.7% YoY based on a forecast of 77% YoY growth in international available seat kilometers (ASK) thanks to both increasing frequency in existing networks and new route opening. International passenger yields may continue to decline, as aggressive fare promotions may be required in order to fill up expanded capacity.
Ancillary revenue: By increasing international passenger volume by a significant scale, we expect VJC ancillary revenue to grow by 41.6% YoY in 2018, achieving VND 7.724 tn. Ancillary revenue per pax is expected to increase by 11% YoY with longer international flights, which encourages customers to spend more as compared to shorter domestic flights.
Sales and Lease Back: Based on VJC’s expected fleet as well as its new aircraft delivery plan in 2018 as stated above, we expect that revenue from SLB activities will record VND 18.65 tn (-5.7% YoY), attributable to gains recognized from 16 new aircraft. We forecast that PBT of SLB activities may total VND 2.232 tn (-34% YoY).
We forecast VJC 2018 core net revenue to achieve VND 29.428 tn (+30% YoY). Core net income may reach VND 3.014 tn (+66% YoY), leading to a core EPS of VND 6,683 (+66%YoY) based a tax rate of 10%. Including SLB profit, 2018 consolidated revenue and net profit will achieve VND 48.325 tn (+15% YoY) and VND 5.179 tn (+2% YoY). EPS will be VND 11,481 (+2% YoY).
2019
We expect VJC 2019 core net revenue to achieve VND 34,222 tn (+16% YoY). Net income of core business might reach VND 3.548 tn (+17.7% YoY), assuming a tax rate of 20%. It should be noted that VJC was granted tax exemption for 2 years from 2014-2015 when the company first made a profit. After that, it has been having 50% tax reduction in 3 years from 2016-2018, implying tax rate of 10%. From 2019 onwards, its corporate tax rate will be 20%.
According to the company plan, VJC may record 17 aircraft under SLB, and we expect SLB profit to record VND 2.15 tn in PBT (-7% YoY). As a result, consolidated revenue and net profit are expected to reach VND 54.341 tn (+12.4% YoY) and VND 5.830 tn (+12.5% YoY). 2019 EPS may reach VND 12,910 (+12.5% YoY).
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VJC operating data assumptions
VJC: Group operating data FY16 FY17 FY18E FY19E RPKs(m) 14,450 20,580 28,686 33,617 ASKs (m) 16,498 23,379 32,753 38,368 Passenger load factor
Domestic 88.9% 89.1% 89.3% 89.8% International 83.4% 84.7% 86% 86% Yield per RPK (U.S. cents) 3.80 3.7 3.3 3.15 Average jet fuel price (USD/bbl) 52.1 65.6 73.8 76.9
Source: VJC
VJC consolidated earnings forecast
(VND bn) 2016 2017 2018F 2019F Net revenue 27,499 42.303 48,325 54,341 EBITDA 2,930 5.635 6,075 7,200 Pretax income 1,177 5.303 5,452 6,474 Net income 2,496 5.073 5,179 5,827 EPS (VND) 5,529 11.356 11,481 12,917 DPS (VND) N/A 2,000 4,000 3,000 Core EPS (VND) 3,137 4,025 6,683 7,861 Core EPS growth (%) 117% 28% 66% 17.7% Dividend yield (%) N/A 1.4% 2% 1.5% PER(x) N/A 17 17.8 15.8 Core PER(x) N/A 48 30.5 26 EV/EBITDAR(x) N/A 11 9 7
Source: VJC, SSI Research
Investment view
At the current price of VND 195,700/share, VJC is trading at 2018 and 2019 EV/EBITDAR metrics of 9x and 7x respectively. We believe that investors will appreciate the continued climb of a core EPS growth of 42% and 18% YoY in 2018 and 2019. VJC is one of the fastest growing airlines compared with peers in term of EPS growth in 2018 and 2019. Besides, VJC is benefiting from lower CASK ex-fuel than regional peers.
International peer comparison
Name Country Market Cap Core EPS growth PER PBR EV/EBITDAR ROE USDm 2018F 2019F 2018F 2019F 2018F 2019F 2018F 2019F 2017
Ryanair Holdings PLC Ireland 23,520 32% 4% 13.3 12.9 3.8 3.2 8.6 8.3 33% EasyJet PLC UK 9,149 42% 19% 15.7 13.1 2.2 2 7.2 6.2 11% JetBlue Airways Corp US 7,165 11% 17% 11.5 9.8 1.4 1.2 5.0 4.5 16% Spirit Airlines Inc US 3,021 3% 25% 12.8 10.3 1.6 1.4 4.8 4.2 27% Southwest Airlines Co US 35,242 42% 16% 12.0 10.5 2.9 2.6 6.7 6.3 37% AirAsia Bhd Malaysia 3,548 35% -2% 9.3 9.4 1.5 1.4 6.4 6.1 22% Cebu Air Inc Philipines 1,167 -21% 1% 6.7 6.6 1.5 1.3 4.3 4.1 33% Average 11,830 0 0 12 10 2 2 6.1 5.9 25%
Vietjet Aviation JSC Vietnam 4,086 66% 17.7% 17.8 15.8 6.4 5.1 9 7 61%
Source: VJC, SSI Research, Bloomberg
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Investment rationales
(1) Encouraging core EPS growth in 2018F and 2019F of 66% YoY and 17.7% YoY respectively.
(2) Improvement in domestic passenger yields thanks to (i) constrained domestic airport infrastructure, ands (ii) slow or no capacity expansion of Vietnam Airlines and Jetstar Pacific.
(3) Higher ancillary revenue per passenger from an increased frequency of international flights. We see huge potential upside in VJC ancillary income per passenger, as its current level of $14.20 USD per passenger is still low compared with that of more than $40 USD per passenger seen among the average of regional LCCs.
(4) We believe that VJC bottom line results will not be significantly impacted by oil increases in 2018, thanks to the cushioning effect from its RASK growth exceeding CASK growth, which will help enlarge the RASK and CASK spread.
Risks and issues
(1) A higher than expected increase in fuel price would be a negative event for all airlines
(2) The continued bottleneck at the Tan Son Nhat international Airport may constrain airlines’ domestic expansion plans due to limited aircraft parking slots
(3) As VJC pushes to expand internationally, a significant number of aircraft delivered in the future may impact international passenger yield in the long run
(4) SLB profit is relatively volatile and difficult to forecast.
(5) Financial risk and FX risk depends upon a significant amount in USD for the purpose of aircraft deposits for its SLB activities, and its payback lease terms with its lessors leaves the company potentially vulnerable.
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APPENDIX 1: ANNUAL FINANCIAL STATEMENTS
VND Billion 2016 2017 2018F 2019F VND Billion 2016 2017 2018F 2019F
Balance Sheet Income Statement
+ Cash 2,741 6,862 12,015 18,339 Net Sales 27,499 42,303 48,325 54,341
+ Short-term investments 1 1 0 0 COGS -23,597 -35,753 -41,239 -46,615
+ Account receivables 7,954 11,485 14,153 19,740 Gross Profit 3,902 6,549 7,086 7,726
+ Inventories 138 267 247 280 Financial Income 145 119 183 349
+ Other current assets 304 315 311 351 Financial Expense -654 -521 -881 -601
Total Current Assets 11,138 18,931 26,726 38,710 Income from associates -21 -15 -39 -47
+ LT Receivables 4,280 5,891 4,587 5,185 Selling Expense -518 -579 -644 -679
+ Net Fixed Assets 1,047 1,529 3,338 5,045 Admin Expense -189 -226 -266 -288
+ Investment properties 0 0 0 0 Income from business operation 2,671 5,298 5,430 6,450
+ LT Assets in progress 181 222 222 222 Net Other Income 32 4 22 25
+ LT Investments 68 68 68 68 Profit Before Tax 1,177 5,303 5,452 6,474
+ Other LT Assets 3,348 5,018 5,485 6,200 Net Income 1,015 5,074 5,179 5,827
Total Long-Term Assets 8,924 12,728 13,700 16,721 NI attributable to shareholders 2,496 5,073 5,182 5,830
Total Assets 20,063 31,658 40,426 49,431 Minority interest 0 0 -3 -3
+ Current Liabilities 9,326 12,444 14,124 16,432
In which: ST debt 6,102 6,897 7,423 8,391 Basic EPS (VND) 5,529 11,241 11,481 12,917
+ Non-current Liabilities 6,002 8,620 12,482 15,277 BVPS (VND) 15,775 23,469 29,718 39,635
In which: LT debt 695 627 825 802 Dividend (VND/share) 0 2,000 4,000 3,000
Total Liabilities 15,329 21,064 26,607 31,709 EBIT 2,884 5,540 5,885 6,959
+ Contributed capital 3,000 4,513 4,513 4,513 EBITDA 2,930 5,635 6,075 7,200
+ Share premium 0 246 246 246
+ Retained earnings 1,703 5,809 9,038 12,943 Growth
+ Other capital/fund 31 26 23 -104 Sales 38.6% 53.8% 14.1% 12.4%
Shareholders' Equity 4,734 10,594 13,821 17,598 EBITDA 123.9% 92.3% 19.3% 18.5%
Total Liabilities & Equity 20,063 31,658 40,428 49,431 EBIT 122.1% 92.1% 18.0% 18.3%
NI 113.2% 103.3% 2% 12.5%
Cash Flow Equity 120.4% 123.8% 30.5% 27%
CF from operating activities 1,636 5,578 8,235 8,733 Chartered Capital 106.9% 50.4% 0.0% 0.0%
CF from investing activities -2,830 -3,042 -2,000 -2,000 Total assets 66.6% 57.8% 27.7% 22.3%
CF from financing activities 2,986 1,597 -1,082 -409
Net increase in cash 1,792 4,133 5,153 6,324 Valuation
Beginning cash 924 2,741 6,862 12,015 P/E n.a 17 17.8 15.8
Ending cash 2,741 6,862 12,015 18,339 P/B n.a 6.3 6.9 5.1
P/Sales n.a 1.6 1.9 1.7
Liquidity Ratios Dividend yield n.a 1.4% 2.0% 1.5%
Current ratio 0.98 1.27 1.89 2.36 EV/EBITDAR n.a 11 9 7
Acid-test ratio 0.93 1.23 1.85 2.32 EV/Sales n.a 1.6 2.0 1.8
Cash ratio 0.26 0.49 0.85 1.12
Net debt / EBITDA 1.14 0.42 -0.26 -0.90 Profitability Ratios
Interest coverage 15.96 23.32 20.37 21.42 Gross Margin 14.2% 15.5% 14.7% 14.2%
Days of receivables 15.9 13.8 12.8 13.8 Operating Margin 10.2% 12.9% 11.9% 12.3%
Days of payables 6.3 4.9 4.9 4.5 Net Margin 9.1% 12.0% 10.7% 10.7%
Days of inventory 2.3 2.1 2.3 2.1 Selling exp./Net sales 1.9% 1.4% 1.3% 1.2%
Admin exp./Net sales 0.7% 0.5% 0.6% 0.5%
Capital Structure ROE 72.5% 66.2% 44.2% 37.4%
Equity/Total asset 0.24 0.33 0.34 0.36 ROA 15.5% 19.6% 13.6% 11.8%
Liabilities/Total Assets 0.76 0.67 0.66 0.64 ROIC 30.9% 35.8% 25.8% 21.8%
Liabilities/Equity 3.24 1.99 1.93 1.80
Debt/Equity 1.44 0.71 0.60 0.52
ST Debt/Equity 1.29 0.65 0.54 0.48
Source: VJC, SSI Research
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APPENDIX 2: QUARTERLY FINANCIAL STATEMENTS
VND Billion 1Q17 2Q17 3Q17 4Q17 VND Billion 1Q17 2Q17 3Q17 4Q17
Balance Sheet Income Statement
+ Cash 2,794 2,650 1,864 6,856 Net Sales 5,107 11,317 6,187 19,693
+ Short-term investments 1 1 1 1 COGS -4,336 -9,568 -4,751 -17,098
+ Account receivables 9,276 7,936 8,785 12,142 Gross Profit 771 1,749 1,435 2,595
+ Inventories 151 181 162 243 Financial Income 23 5 80 10
+ Other current assets 208 248 238 280 Financial Expense -178 -81 -186 -76
Total Current Assets 12,430 11,016 11,051 19,522 Income from associates 0 0 0 0
+ LT Receivables 6,474 8,335 10,030 5,726 Selling Expense -142 -127 -188 -123
+ Net Fixed Assets 1,034 1,293 1,280 1,518 Admin Expense -52 -50 -56 -67
+ Investment properties 0 0 0 0 Income from business operation 418 1,480 1,075 2,330
+ LT Assets in progress 209 187 261 226 Net Other Income 0 9 0 -5
+ LT Investments 68 68 68 68 Profit Before Tax 418 1,489 1,075 2,325
+ Other LT Assets 3,143 3,848 3,523 4,849 Net Income 376 1,420 966 2,316
Total Long-Term Assets 10,928 13,731 15,163 12,387 NI attributable to shareholders 376 1,420 967 2,316
Total Assets 23,358 24,747 26,214 31,908 Minority interest 0 0 -1 1
+ Current Liabilities 11,918 11,919 12,639 15,140 Basic EPS (VND) 0 0 2,142 9,214
In which: ST debt 6,829 5,500 6,796 6,905 BVPS (VND) 21,320 22,704 18,372 22,237
+ Non-current Liabilies 4,566 5,507 5,282 6,731 EBIT 479 1,547 1,132 2,387
In which: LT debt 695 660 661 625 EBITDA 495 1,568 1,168 2,410
Total Liabilities 16,484 17,426 17,920 21,871
+ Contributed capital 0 0 0 0 Growth (YoY)
+ Share premium 1,536 1,536 246 246 Sales -22.5% 89.7% -10.3% 144.7%
+ Retained earnings 0 0 0 0 EBITDA -20.5% 102.6% 36.7% 255.0%
+ Other capital/fund 5,339 5,786 8,047 9,791 EBIT -22.6% 101.2% 35.2% 262.4%
Owners' Equity 6,875 7,321 8,293 10,037 NI -30.8% 104.5% 31.5% 343.0%
CF from operating activities 305 1,821 572 7,036
CF from investing activities -2,879 -261 -1,993 -2,150 Profitability Ratios
CF from financing activities 2,631 -1,687 618 119 Gross Margin 15.1% 15.5% 23.2% 13.2%
Net increase in cash 57 -126 -803 5,005 Operating Margin 9.2% 13.4% 18.0% 12.0%
Beginning cash 2,741 2,794 2,650 1,864 Net Margin 7.4% 12.5% 15.6% 11.8%
Ending cash 2,794 2,650 1,864 6,856 Selling exp./Net sales 2.8% 1.1% 3.0% 0.6%
Admin exp./Net sales 1.0% 0.4% 0.9% 0.3%
Liquidity Ratios
Current ratio 1.04 0.92 0.87 1.29 Capital Structure
Acid-test ratio 1.01 0.89 0.84 1.25 Equity/Total asset 0.29 0.30 0.32 0.31
Cash ratio 0.23 0.22 0.15 0.45 Liabilities/Total Assets 0.71 0.70 0.68 0.69
Net debt / EBITDA 9.55 2.24 4.79 0.28 Liabilities/Equity 2.40 2.38 2.16 2.18
Interest coverage 7.93 26.89 19.83 38.14 Debt/Equity 1.09 0.84 0.90 0.75
ST Debt/Equity 0.99 0.75 0.82 0.69
Source: VJC, SSI Research
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1. ANALYST CERTIFICATION
The research analyst(s) on this report certifies that (1) the views expressed in this research report accurately reflect his/her/our own personal views about the securities and/or the issuers and (2) no part of the research analyst(s)’ compensation was, is, or will be directly or indirectly related to the specific recommendation or views contained in this research report.
2. RATING
Within 12-month horizon, SSIResearch rates stocks as either BUY, HOLD or SELL determined by the stock’s expected return relative to the market required rate of return, which is 18% (*). A BUY rating is given when the security is expected to deliver absolute returns of 18% or greater. A SELL rating is given when the security is expected to deliver returns below or equal to -9%, while a HOLD rating implies returns between -9% and 18%.
Besides, SSIResearch also provides Short-term rating where stock price is expected to rise/reduce within three months because of a stock catalyst or event. Short-term rating may be different from 12-month rating.
Industry Rating: We provide the analyst’ industry rating as follows:
Overweight: The analyst expects the performance of the industry over the next 6-12 months to be attractive vs. the relevant broad market
Neutral: The analyst expects the performance of the industry over the next 6-12 months to be in line with the relevant broad market
Underweight: The analyst expects the performance of the industry over the next 6-12 months with caution vs. the relevant broad market.
*The market required rate of return is calculated based on 5-year Vietnam government bond yield and market risk premium derived from using Relative Equity Market Standard Deviations method. Our rating bands are subject to changes at the time of any significant changes in the above two constituents.
3. DISCLAIMER
The information, statements, forecasts and projections contained herein, including any expression of opinion, are based upon sources believed to be reliable but their accuracy completeness or correctness are not guaranteed. Expressions of opinion herein were arrived at after due and careful consideration and they were based upon the best information then known to us, and in our opinion are fair and reasonable in the circumstances prevailing at the time, and no unpublished price sensitive information would be included in the report. Expressions of opinion contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. This report also does not recommend to U.S. recipients the use of SSI to effect trades in any security and is not supplied with any understanding that U.S. recipients will direct commission business to SSI. SSI and other companies in the SSI and/or their officers, directors and employees may have positions and may affect transactions in securities of companies mentioned herein and may also perform or seek to perform investment banking services for these companies.
This document is for private circulation only and is not for publication in the press or elsewhere. SSI accepts no liability whatsoever for any direct or consequential loss arising from any use of this document or its content. The use of any information, statements forecasts and projections contained herein shall be at the sole discretion and risk of the user.
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SSI – RESEARCH INSTITUTIONAL RESEARCH & INVESTMENT ADVISORY
4. CONTACT INFORMATION
Institutional Research & Investment Advisory
Kim Nguyen Analyst, Industrials Tel: (84-28) 3824 2897 ext. 2140 [email protected]
Phuong Hoang Hung Pham Giang Nguyen, ACCA Deputy Managing Director, Associate Director Associate Director Head of Institutional Research & Investment Advisory [email protected] [email protected] [email protected]
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